Development of Business Models of Financial Monitoring Processes of Economic Agents

Abstract. The article is devoted to the problems of the development of a system for combating the legalization of income obtained illegally in the context of digitalization of banking activities. The concept of the effectiveness of the anti-money laundering system was considered. The expediency of using the utility approach for modeling the effectiveness of the system for combating money laundering has been determined. The indicator of the effectiveness of the system of combating money laundering was chosen as the share of indictments sent to the court in the total number of criminal offenses for which pre-trial investigation was carried out in the corresponding period. The first alternative of choice — the focus on the development of identifying suspicious financial transactions is characterized by the indicator Share of criminal offenses for which pre-trial investigation was carried out per one transaction report submitted to the State Financial Monitoring Service. The second alternative of choice — the development of innovative technologies, is characterized by the indicator of the Level of digitalization of the economy. The input data are the indicators on the crime rate in Ukraine, the work of the pre-trial investigation bodies, obtained from the State Financial Monitoring Service of Ukraine, the General Prosecutor's Office of Ukraine and the State Statistics Service of Ukraine, suspicious financial transactions and the number of Internet subscribers. On the basis of the calculated autocorrelation coefficients of zero differences and determination of their statistical significance, a nonlinear function of the relationship between mictoramas was selected. Using the Stone-Geary utility function, which for the selected input data took the form of a Cobb-Douglas power function, the degree of response of alternative approaches to improving the effectiveness of the system of combating criminal proceeds was determined. The degree of digitalization of the economy has a high level of elasticity. Therefore, to increase the effectiveness of the system of combating money laundering, it is necessary to develop innovative information technologies in the field of FinTech. Keywords: bank, countering the legalization of criminal proceeds, the utility function of Stone-Geary, the Cobb-Douglas function, the effectiveness of combating the legalization of criminal proceeds, the digitalization of the economy. JEL Classification C49, O17, O33, G21, G14 Formulas: 4; fig.: 5; tabl.: 0; bibl.: 32.

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Banking in Digital Age: Efficiency of Аnti-Money Laundering System

Lyeonov

Vasilyeva

Mynenko

et al. 2021

ФКДПТП

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Business Process Model for Monitoring the Automatic Payments in the "Client-Bank" System

et al. 2021

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The innovative development of banking presupposes modernization in the approaches to anti-money laundering. The article considers the issue of financial monitoring of banking operations without bank employees’ participation through the "Client-Bank" system. Two models for monitoring the automatic payments in the "Client-Bank" system are identified. The list of functions performed by the "Client-Bank" system in terms of types of clients: individuals and legal entities (including individuals-entrepreneurs) was determined. The first model describes general indicators of transactions that have the risk of money laundering. The second model focuses on the specific features of the "Client-Bank" system functionality for legal entities or individual entrepreneurs. Several criteria for the riskiness of the operation in terms of money laundering are considered. The developed business process model takes into account the verification of the participant's affiliation to countries that do not implement or improperly implement the recommendations of intergovernmental organizations, the participant's affiliation to politically significant or related persons and the withdrawal of capital abroad, including offshore areas . In addition, checks of financial condition of counterparties, regularity of receipts of payments and cash withdrawals, circulation of foreign currency, loan repayment, receipt of a significant amount of cash, ip-address of the client and description of the transaction are included. A feature of the business model for legal entities is the verification of NACE compliance, analysis of the number of contractors, analysis of the timeliness of tax payments. Directions for further development of this study identify the possibility of intellectualizing the financial monitoring system and improving the regulatory framework in the system "Client-Bank" to enhance the system of anti-money laundering in banking institutions.

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Cyber Crimes, Financial Offenses and Legalization of Criminal Income in the Conditions of Digitalization of Ukraine's Economy

Lyeonov

Mynenko

Доценко³

2021

Scientific Opinion: Economics and Management

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Digitalization of the economy is identified as one of the leading and priority fields of Ukraine's development. The complexity and development of new information technologies leads to the development of new methods and approaches to economic and financial activities. But despite the significant useful effects of digitalization, preferable conditions are also created for criminals. It is becoming easier to launder money, commit fraud with financial instruments and create new opportunities for cybercriminals. These processes lead to a detailed analysis of the determinants of criminal activity that has the greatest impact on the economy. The simulation identifies trends in the relationship of cybercrime, financial offenses and money laundering with generalized characteristics of fintech development, the number of reports of suspicious transactions submitted to the SCF and the level of development of key areas of financial activity: banks, insurance companies and stock exchanges. The study identified the direction and extent of the impact of digitalization, financial monitoring and activities of banking institutions, stock exchanges, insurance companies on the number of financial and cybercrimes and money laundering. MAR-spline models of interdependence between regressors and regressions were built. The adequacy of the constructed models is checked and confirmed. The advantage of MAR-spline models determines the possibility of calculating the limit values of factor features. The presence of the influence of factor features is traced either only until the achievement of certain threshold values or only when these threshold values are exceeded. Some factor characteristics had a multiplier effect on the resulting offenses. The practical application of the FinTech spline model of the interdependence of innovation and financial and cybercrime through financial institutions will benefit both financial intermediaries and users of the financial system, as well as government regulators and supervisors. Such a model can be useful and interesting to international organizations, investors and developers of regulatory standards, banking institutions, and other scientists conducting research in this area.

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Development of Business Models of Financial Monitoring Processes of Economic Agents

Cited by 3 publications

References 3 publications

Banking in Digital Age: Efficiency of Аnti-Money Laundering System

Banking in Digital Age: Efficiency of Аnti-Money Laundering System

Business Process Model for Monitoring the Automatic Payments in the "Client-Bank" System

Cyber Crimes, Financial Offenses and Legalization of Criminal Income in the Conditions of Digitalization of Ukraine's Economy

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